We’ve been building section 8 rental properties in Detroit for the past 5 years and the cash flow has been spectacular and equally so regarding equity.

A 30-year fixed rate mortgage is currently sits around 6.15% interest:All else being equal, lower mortgage rates reduce the cost of ownership and, thereby, allow more people to afford to buy.

If I NEED to sell within five years, this calculation provides insight into the real-world return that incorporates these vital aspects of the investment.I want a balance between steady cash flow and long-term appreciation potential. 

You need to acquire one or more replacement properties that are equal to or greater than $275,000 (ish).The selling expenses, costs and fees are what they are. 

Most employers now direct-deposit, so you can also cross-verify the legitimacy of paystubs (are their payroll deposits equal to paystub income?).

You likely answered your own question...rent - mortgage is not equal to cash flow. 

As long as your purchase price + rehab costs are equal to or less than fair market value then you're good to go! 

My assumptions based off research is I will be able to deduct 1/2 of all allowable expenses based off the ADU square footage (My understanding of that list below)  1/2 Mortgage Interest (Not principle) 1/2 Utilities 1/2 Property Taxes 1/2 Insurance (assuming I don't have separate ADU insurance)  1/2 general house maintenance (depending on the issue and if it's related to the ADU)  1/2 Depreciation (Home value, not land divided by 27.5)  KEY QUESTION: If my mortgage (PITI) is $5400, and all of those ADU deductions equal $3800 monthly, and my ADU income is $1800 monthly, am I allowed to pay the difference in "deductions" from my real estate business income? 

Oh boy, another post about what amount of doors equals x amount per month

Cap Rate is vital for evaluating the potential return on investment and comparing different properties.Understanding both metrics allows an investor to make informed decisions about financing, property selection, and investment strategy.